Our laboratory has identified and characterized specific viral mutations associated with variant biological behaviors of certain HBV strains. Two mutations in the HBV core promotor were identified in a HBV strain associated with fulminant hepatitis leading to highly enhanced replication as a result of increased viral encapsidation of pregenomic RNA into the core particles. Our previous publications suggest that the above mutations affecting a novel genetic element influence viral encapsidation by a co- or post-transcriptional mechanism resulting in enhanced core synthesis and viral replication. [unreadable] [unreadable] As a second aspect of this project, we have also begun to define and functionally study drug-resistant HBV mutants that were identified in our clinical treatment trial of hepatitis B. Continuing lamivudine (LAM) after the development of resistance was the only option prior to the development of alternative nucleos(t)ide analogues. Little is known about the evolution of mutations in this setting and whether the pattern of mutations may affect clinical outcome. We studied the evolution of mutations under LAM therapy in HBeAg CHB patients (pts) and determined whether patterns of mutations influence clinical outcome. Twenty-two HBeAg pts received LAM daily for a mean of 5 years in a long-term trial. LAM resistance developed in 17 pts after a mean of 20 months. Direct sequencing of the entire polymerase gene was performed using stored sera from baseline, time of development of virologic breakthrough (VB) and last follow-up while on LAM (mean time from VB to follow-up was 40 months). The 17 pts included 16 males, mean age 44 years, 10 with HBV genotype (gt) A and 7 with gt C. At VB the rtM204V mutation occurred more commonly in pts. with gt A compared to gt C 70% vs. 29%. In contrast at VB, rtM204I was found in 86% of gt C and 30% in gt A pts. and occurred in 100% of gt C pts on follow-up. Additional mutations developed in 59% of pts. on follow-up sample. The rtL180M mutation, which was present in 59% at time of VB, was found in 94% of pts at follow-up. The type of compensatory mutation differed between gt: rtV173L occurred only in gt A whereas the rtL80I was found only in gt C. Several mutations were observed outside the reverse transcriptase domain but with no consistent pattern. VB was associated with ALT flares in 70% of pts. Additional mutations after VB were associated with ALT flares in 50% (vs. 14% without additional mutations) and progression to cirrhosis in 2 patients. Studies are in progress to determine whether the rtM204V, rtM204I, rtM204VI rtL180M mutations replicate differently in gts A or C. In conclusion, we found a strong association between viral gt with both type of LAM rt204VI and compensatory mutation. Continuing LAM leads to the development of compensatory mutations, which often lead to ALT flares and worsening of clinical disease. Defining the molecular basis of variant manifestations of liver disease associated with infection by naturally occurring or drug-induced HBV mutants may contribute to further understanding of the pathogenesis of HBV infection.